National Delinquency Survey, NDS, Mortgage Bankers Association of America, MBA, economyMortgagePress.comMortgage Delinquencies, Foreclosures, Mortgage Bankers Assocaition of Amerca, MBAA
The number of homeowners late in paying their mortgages and the
number of foreclosed homes increased in the third quarter of 2000,
according to a quarterly survey conducted by the Mortgage Bankers
Association of America (MBA).
In MBA's latest National Delinquency Survey (NDS), the
delinquency rate for loans on one- to four-unit residential
properties increased 22 basis points to 4.04 percent during the
third quarter. The percentage of loans on which foreclosure was
started during the quarter increased by five basis points to 0.31
percent, and the percentage of loans in the foreclosure process at
the end of the quarter dropped one basis point to 0.84 percent.
The third-quarter gross domestic product was weaker than
expected at 2.2 percent, and employment numbers became weaker
during the quarter as well.
Douglas G. Duncan, MBA's chief economist, said that slowing
income growth and increasing unemployment will combine with the
aging loan portfolio to increase delinquency rates. However, the
rise may be tempered if the Federal Reserve begins easing interest
The third-quarter increase in delinquencies was the second
consecutive quarterly rise. After falling 71 basis points from the
first quarter of 1998 through the first quarter of 2000, the
delinquency rate in the past two quarters has increased by 32 basis
Delinquencies increased in each of three loan categories. The
percentage of loans 30 days past due increased 16 basis points to
2.84 percent, loans 60 days past due increased four basis points to
0.64 percent, and the percentage of loans 90 days or more past due
increased two basis points to 0.56 percent.
The delinquency rate also increased for each of the three loan
types during the quarter. The rate for conventional loans was 2.55
percent, up 13 basis points from the previous quarter, and the
rates for FHA and VA loans were 9.04 percent, up 31 basis points,
and 6.80 percent, up 13 basis points, respectively.
On a smaller sample of loans, the NDS found that the delinquency
rate for both fixed- and adjustable-rate mortgages (ARMs) increased
in the third quarter. The rate increased 21 basis points to 3.16
percent for fixed-rate mortgages and jumped 20 basis points to 5.30
percent for ARMs.
The increase in foreclosures that began during the third quarter
pushed that rate up to its highest level since the first quarter of
1999 when it was 0.32 percent, while the percentage of loans in the
foreclosure process at the end of the quarter was at the lowest
level since the fourth quarter of
1985 when it was 0.81 percent.
The inventory of loans in foreclosure at the end of the quarter
varied by loan type. The percentage of conventional loans in
foreclosure increased 2 basis points to 0.59 percent. The
percentage of FHA loans in foreclosure decreased 11 basis points to
1.69 percent, and the percentage of VA loans in foreclosure
decreased 12 basis points to 1.32 percent.